India spends about 1 percent of its gross domestic product (GDP) on public health, compared to 3 percent in China and 8.3 percent in the United States.HYDERABAD: Indian pharma industry captains have reiterated their concerns over constant reduction in the healthcare budget of the Central government and an increasing pressure on price reduction which is resulting in squeezed margins.

India spends about 1 percent of its gross domestic product (GDP) on public health, compared to 3 percent in China and 8.3 percent in the United States. Despite this low budget allotment, the contribution has been decreasing or kept stagnant in India since several years.

According to Glenn Saldanha, chairman and managing director, Glenmark Pharmaceuticals, “The government is keen on reducing the drug prices, which are already at the world’s lowest, squeezing the Indian pharma industry that has already become very competitive with large number of MNCs and domestic players operating in this space.”

He was speaking on the sidelines of Bio Asia 2017 in Hyderabad on Tuesday.

While the government’s healthcare budget has been reducing, even public-private partnerships have largely not been successful, said Dr Vasanth Narasimhan, global head of drug development and chief marketing officer, Novartis.

K. Taraka Rama Rao, Telangana's industries minister attributed this to the lack of people’s confidence in government healthcare institutions.

While addressing the concern on the investment on research and development (R&D), Dr Narasimhan said, “The bio-technology industry faces a challenge in getting the returns on huge investments they make on the research and development. The pharmaceutical and biotechnology industry around the world invests almost a $150 billion and the question we have to answer is how efficiently we can use the funds and how the companies can get the returns for their investors.”

“Each successful drug development today starts with a discovery or an invention followed by many years of development, creating a market and getting the drug to be actually used by the ethical community," said Nobel Laureate Professor Kurt Wuthrich, Scripps Research Institute, USA in his Key note address. "I lived through this myself, I have seen that it took two generations of medical doctors to adopt MRI and use it where it is more apt to provide information needed.”

Only in India the healthcare financing is very small when compared to the financing by the other forces rather than the patient himself or herself paying out of pocket. Having 70-75% of the expenses as out-of-pocket, in my opinion, is not a right approach to managing healthcare in a country where the patients tend to sub-optimally purchase healthcare if he/she has to pay out-of-pocket.